After completing graduation, three close friends (Gopal, Shankar, and Vinod) decided to start a partnership business of manufacturing mobile accessories. However, all three of them are confused about the type of partnership, they should start.• Gopal wants that the partnership should be such that it can be brought to an end at the desire of any partner.• Shankar wants to do the partnership business for a period of three years only. • Vinod wants that his liability should be limited in the business. Based on the above case answer the following questions: a) Define Partnership according to ‘The Indian Partnership Act, 1932’. b) Explain the Partnership Deed. c) Identify the types of Partnerships that the three friends are referring to.
Answers
Answer:
All a,b,c questions are well explain below:
Explanation:
(a)
According to "The Indian partnership Act, 1932"
"Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all". Persons who have entered into partnership with one another are called individually.
(b) A partnership deed is an agreement between the partners of a firm that outlines the terms and conditions of partnership among the partners. ... The partnership deed serves this purpose. It specifies the various terms such as profit/loss sharing, salary, interest on capital, drawings, admission of a new partner, etc.
Though issuing a partnership deed is not mandatory, but it’s always better to enter into a partnership deed to avoid any possible disputes and litigation among the partners. The agreement can be made between two or more partners. It must be stamped and signed by all the partners.
The partnership deed contains the following details:
Business of the firm:
Business to be undertaken by the partners of the firm.
Duration of Partnership:
Whether the duration of the partnership firm, is for a limited period or for a specific project.
Sharing of profit/loss:
Ratio of sharing profits & losses of the firm among partners.
Salary and commission:
Details of the salary, and commission if any, payable to partners.
Capital contribution:
Capital contribution to be made by each partner and the interest on said capital to be paid to partners.
Partner’s Drawings:
Policy regarding the drawings from the firm allowed to each partner and interest if any to be paid by partner, to the firm on such drawings.
(c)
The three friends are referring to the types of partnership are:
As per Gopal wants to start partnership called general partnership.
As per Shankar wants to start partnership called limited partnership.
And as per Vinod wants it is called limited liability partnership.
Answer:
A partnership is a formal agreements between two or more parties to manage and operate a business and share its profits.
Explanation:
a) Section 4 of the Indian Partnership Act defines partnership as "Partnership is a relationship between persons who have agreed to share the profits of a business carried on by all or by some of them acting for all".
(b) A partnership deed is a partnership agreement between the partners of a firm that outlines the terms of the partnership between the partners. The purpose of a partnership agreement is to provide a clear understanding of the roles of each partner, which ensures the smooth running of the firm's operations.
(c) Three friends mention the types of partnership:
According to Gopal, he wants to start a partnership called a general partnership.
According to Shankar, he wants to start a partnership called a limited partnership.
And as Vinod wants, it is called a limited company.
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